Mazda wants to break through in China

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

In the past two years, Masahiro Moro, as the president of Mazda Motor Corporation (hereinafter referred to as "Mazda"), has visited China four times, each trip deepening his understanding of this market.

"The pace of electrification and intelligence development in the Chinese market far exceeds that of other regions globally. This trend will not stop; it will only continue to advance." During an interview at the Shanghai Auto Show, Moro's tone conveyed both amazement and a sense of urgency.

He cited data from last year’s Chinese new energy vehicle market, stating that since the second half of last year, the penetration rate of new energy vehicles in China has consistently surpassed 50%, with most being domestic brands, while Tesla follows closely with 7%, and Japanese brands account for only 1%.

Behind this figure is the "involution" pattern formed by brands like BYD, Nio, and Li Auto through price wars and technological iterations.

Toru Nakajima, chairman of Mazda (China) Enterprise Management Co., Ltd., also candidly told Wall Street Insight during the interview that new energy vehicles generally do not make profits, but now the profit margins for fuel vehicles are also being compressed.

Under this dual pressure, Mazda must find a differentiated path.

Mazda has been collaborating with its Chinese partner Changan Automobile for 20 years. The already launched EZ-6 and the EZ-60 unveiled at the Shanghai Auto Show bear greater responsibilities. These two models, in addition to being produced and sold in the Chinese market, also have plans to be exported to other countries in the future. Moro stated that they will continue to actively discuss various areas of cooperation with Changan Automobile.

The EZ-60 not only features Mazda's iconic "Kodo" design and continuously variable damping suspension but also deeply integrates smart cockpit technology from local Chinese suppliers. The 23-speaker immersive sound system and 3D HUD interactive interface of the EZ-60 are specifically aimed at the extreme pursuit of technology by young Chinese consumers.

Moro stated that the current level of intelligent technology in China has reached a considerable height, and they will continue to actively cooperate with Chinese suppliers to create products that satisfy consumers more.

Nakajima indicated that in the current market environment, it is essential to leverage unique characteristics that differ from others and find ways to increase profitability. On the cost side, Mazda will collaborate with Changan Automobile to compress costs related to electric drives and batteries as much as possible.

As for long-term planning, Mazda aims to increase the sales proportion of new energy models in China to 60% to 70% by 2030.

If the Chinese market is Mazda's "radical testing ground," then the North American market demonstrates its "cautious progress." Although U.S. government policy support for fuel vehicles has delayed the electrification process, Mazda has not abandoned its technological reserves. Moro revealed that the sales target for new energy vehicles in the North American market is "set a bit too high," but the reality is that hybrid models remain the mainstay.

This diversified solution aims to balance the uniqueness of different markets and the long-term development of the brand. Moro pointed out that although the popularization of new energy vehicles in the North American market faces challenges, Mazda will still actively respond by providing a diverse product portfolio to meet the needs of different consumers Faced with challenges of poor sales in certain markets, Mazda is taking a series of measures to improve its sales situation. In Japan, Mazda is attracting more customers by rebuilding its sales network and penetrating brand value. In Thailand, it aims to enhance market performance by introducing new SUVs and optimizing the layout of 4S stores.

In the Chinese market, Mazda plans to boost sales by promoting new energy vehicles to existing customers of fuel vehicles and concentrating resources on advertising and sales training in regions where Japanese cars have strong sales. With the launch of the EZ-60, Mazda hopes to form a new product lineup and gain recognition from more consumers.

In today's environment where global automotive giants are betting on electrification at a scale of hundreds of billions, Mazda's "Double Hundred Doubling" strategy (doubling sales and profits) appears particularly low-key. However, behind this low profile is a clear awareness of its own boundaries.

As the industry reshuffles accelerates, unique brand value and flexible strategic adjustments may become the key to navigating through cycles. For Mazda, the success or failure in the Chinese market will determine whether it can continue to write the "small but beautiful" story at the critical point of 2030